On June 3, 2025, Bill C-2, An Act respecting certain measures relating to the security of the border between Canada and the United States and respecting other related security measures (the Strong Borders Act for short) was introduced in Canada’s House of Commons, writes the Investment Industry Association of Canada.
Among the measures in the Bill:
Part 10 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) increase the maximum administrative monetary penalties that may be imposed for certain violations and the maximum punishments that may be imposed for certain criminal offences under that Act;
- Currently, violations are categorized into three classes – minor, serious, and very serious – and carry maximum penalties of $1,000, $100,000, and $500,000, respectively. Under the Bill, maximum penalties will increase to $40,000, $4 million, and $20 million, respectively.
- The Bill includes a new requirement for reporting entities – i.e., they need to ensure their compliance programs are “reasonably designed, risk-based and effective.” Failure to do so will be considered a ‘very serious’ violation. FINTRAC will assess AML compliance programs and their effectiveness more comprehensively during examinations.
(b) replace the existing optional compliance agreement regime with a new mandatory compliance agreement regime that, among other things,
- requires every person or entity that receives an administrative monetary penalty for a prescribed violation to enter into a compliance agreement with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC),
- requires the Director of FINTRAC to make a compliance order if the person or entity refuses to enter into a compliance agreement or fails to comply with such an agreement, and
- designates the contravention of a compliance order as a new violation under that Act;
- A contravention of a compliance order would carry a penalty of up to $30 million or 3% of the reporting entity’s gross global revenue, whichever is greater.
(c) require persons or entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, other than those already required to register (i.e. money service businesses), to enroll with FINTRAC; and
(d) authorize FINTRAC to disclose certain information to the Commissioner of Canada Elections, subject to certain conditions.
Part 11 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to prohibit certain entities from accepting cash deposits from third parties and certain persons or entities from accepting cash payments, donations or deposits of $10,000 or more. It also makes a related amendment to the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
Part 12 amends the Office of the Superintendent of Financial Institutions Act to make the Director of FINTRAC a member of the committee established under subsection 18(1) of that Act. It also amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to enable the Director to exchange information with the other members of that committee.